SAN JOSE, Calif.--(BUSINESS WIRE)--Western Digital Corporation (NASDAQ: WDC) (“Western Digital” or the
“company”) today announced concurrent proposed offerings of $2.3 billion
aggregate principal amount of senior notes due 2026 (the “2026 notes”)
and $1.0 billion aggregate principal amount of convertible senior notes
due 2024 (the “2024 convertible notes” and, together with the 2026
notes, the “notes”), in each case subject to market and other conditions
as further described below. The notes will be issued by Western Digital,
and guaranteed, jointly and severally on a senior basis, by certain of
Western Digital’s subsidiaries.

In connection with the offerings of the 2026 notes (the “2026 notes
offering”) and the 2024 convertible notes (the “2024 convertible notes
offering” and, together with the 2026 notes offering, the “offerings”),
Western Digital expects to obtain a new $5.022 billion Term Loan A-1
facility maturing 2023, reflecting a $1.0 billion increase in the size
of the Term Loan A. The proceeds of this new Term Loan A-1 facility
would be used to settle Western Digital’s existing $4.022 billion Term
Loan A maturing in 2021. In connection with the offerings and the Term
Loan A replacement, Western Digital also expects to extend the maturity
of its existing revolving credit facility under its senior credit
facilities by approximately two years to a maturity date of 2023, and to
seek amendments to its senior credit facilities to, among other things,
provide for more covenant flexibility, a decrease in the interest rate
applicable to the new Term Loan A-1 facility and/or revolving credit
facility and a release of the security and guarantees under certain
circumstances. In the event the full amount of the 2024 convertible
notes offering is not completed, Western Digital may further increase
the size of the new Term Loan A-1 facility by up to an additional $1.0
billion.

Concurrently with the offerings, the company also expects to commence a
cash tender (the “tender offer”) to purchase any and all of its
currently outstanding 10.500% senior unsecured notes due 2024 (the
“existing 2024 unsecured notes”).

Western Digital expects to offer the 2026 notes in a public offering
(the “2026 notes offering”). The company intends to use the net proceeds
of the 2026 notes offering, together with available cash on hand, to
fund the tender offer, and if the tender offer is not consummated or if
the company purchases less than all of the currently outstanding
existing 2024 unsecured notes in the tender offer, to fund the
redemption of any existing 2024 unsecured notes that remain outstanding,
in each case, including all accrued interest, related premiums, fees and
expenses. BofA Merrill Lynch and J.P. Morgan Securities LLC are acting
as lead book-running managers and RBC Capital Markets, Mizuho Securities
and Wells Fargo Securities are acting as book-running managers for the
2026 notes offering.

The company intends to offer the 2024 convertible notes in a private
offering to only qualified institutional investors (“QIBs”) in
accordance with Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”). In addition, the company expects to grant the
initial purchasers a 30-day option to purchase up to an additional $100
million aggregate principal amount of 2024 convertible notes. The
company intends to use the net proceeds of the 2024 convertible notes
offering, together with the net proceeds from the new Term Loan A-1
facility and available cash on hand, to redeem all of its currently
outstanding 7.375% senior secured notes due 2023 (the “2023 secured
notes”), including all accrued interest, related premiums, fees and
expenses. The 2024 convertible notes will be convertible into cash
and/or shares of Western Digital’s common stock or a combination thereof
at its election. The interest rate, conversion price and other terms of
the 2024 convertible notes are to be determined.

The company expects to repurchase shares of its common stock
concurrently with the 2024 convertible notes offering in privately
negotiated transactions as well as subsequently through additional share
repurchases that will occur after the completion of the 2024 convertible
notes offering with available cash on hand. The aggregate amount of
these stock repurchases could be up to $500 million.

The 2024 convertible notes, the common stock, if any, deliverable upon
conversion of the 2024 convertible notes and the related guarantees have
not been and will not be registered under the Securities Act or the
securities laws of any other jurisdiction. They may not be offered or
sold in the United States or to, or for the benefit of, U.S. persons
absent registration under, or an applicable exemption from, the
registration requirements of the Securities Act.

The 2026 notes and 2024 convertible notes offerings are being conducted
as separate offerings. Neither offering is contingent upon the other.

Upon successful completion of the transactions described above, we
expect to reduce our total debt outstanding by up to approximately $1
billion. We expect that our available cash on hand will decrease by
approximately $2.4 billion after giving effect to the transactions
described above.

The company has filed a registration statement (including a prospectus)
with the Securities and Exchange Commission (the “SEC”) for the 2026
notes offering. Before you invest, you should read the prospectus in the
registration statement and other documents the company has filed with
the SEC for more complete information about the company and the
offerings. You may obtain these documents for free by visiting EDGAR on
the SEC website at www.sec.gov
or from BofA Merrill Lynch, NC1-004-03-43, 200 North College Street, 3rd
floor, Charlotte, NC 28255-0001, Attn: Prospectus Department, or by
email at dg.prospectus_requests@baml.com;
or from J.P. Morgan Securities LLC via Broadridge Financial Solutions,
1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at
(866) 803-9204. This press release does not constitute an offer to sell
or a solicitation of an offer to buy the notes or any other security,
nor will there be any sale of the notes or any other security in any
state or jurisdiction in which such an offer, solicitation or sale is
not permitted. Any offer or sale will be made only by means of a
prospectus or an offering memorandum, as applicable, and a free writing
prospectus which has or will be filed with the SEC, as applicable.

About Western Digital

Western Digital creates environments for data to thrive. The company is
driving the innovation needed to help customers capture, preserve,
access and transform an ever-increasing diversity of data. Everywhere
data lives, from advanced data centers to mobile sensors to personal
devices, our industry-leading solutions deliver the possibilities of
data. Western Digital data-centric solutions are marketed under the
G-Technology™, HGST, SanDisk®, Tegile™, Upthere™ and WD®
brands.

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements concerning proposed offerings of the notes. These
forward-looking statements are based on management’s current
expectations and are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed or implied in
the forward-looking statements, including: volatility in global economic
conditions; uncertainties with respect to the company’s business
ventures with Toshiba; business conditions and growth in the storage
ecosystem; impact of competitive products and pricing; market acceptance
and cost of commodity materials and specialized product components;
actions by competitors; unexpected advances in competing technologies;
the development and introduction of products based on new technologies
and expansion into new data storage markets; risks associated with
acquisitions, mergers and joint ventures; difficulties or delays in
manufacturing; impacts of new tax legislation; and other risks and
uncertainties listed in the company's filings with the SEC, including
the company’s Form 10-Q filed with the SEC on Nov. 7, 2017, to which
your attention is directed. You should not place undue reliance on these
forward-looking statements, which speak only as of the date hereof, and
the company undertakes no obligation to update these forward-looking
statements to reflect new events or events.

Western Digital, the Western Digital logo, G-Technology, HGST, SanDisk,
Tegile, Upthere and WD are registered trademarks or trademarks of
Western Digital Corporation or its affiliates in the U.S. and/or other
countries.